STMICROELECTRONICS N.V.
-- Q4 net revenues $3.24 billion; gross margin 38.8%; operating margin
20.3%; net income $582 million
-- FY net revenues $10.22 billion; gross margin 37.1%; operating margin
12.9%; net income $1.11 billion
-- Business outlook at mid-point: Q1 net revenues of $2.93 billion and gross
margin of 38.5%
Geneva, January 28, 2021 - STMicroelectronics (NYSE: STM), a global
semiconductor leader serving customers across the spectrum of
electronics applications, reported U.S. GAAP financial results for the
fourth quarter ended December 31, 2020. This press release also contains
non-U.S. GAAP measures (see Appendix for additional information).
ST reported fourth quarter net revenues of $3.24 billion, gross margin
of 38.8%, operating margin of 20.3%, and net income of $582 million or
$0.63 diluted earnings per share.
Jean-Marc Chery, STMicroelectronics President & CEO, commented:
-- "As we announced on January 8, 2021, our Q420 net revenues increased
21.3% sequentially, 580 basis points above the high end of our outlook
range. Our engaged customer programs in Personal Electronics, as well as
continuous acceleration in demand, especially of Automotive products and
Microcontrollers, were the main factors that contributed to this result.
Fourth quarter gross margin was 30 basis points above the mid-point of
our outlook range. On a sequential basis, our operating margin was up 800
basis points to 20.3% and free cash flow increased to $512 million.
-- "Based upon a stronger than expected second half of 2020, full year
revenues increased 6.9% to $10.22 billion, with an operating margin of
12.9%.
-- "ST's first quarter outlook, at the mid-point, is for net revenues of
$2.93 billion, increasing year-over-year by 31.2% and decreasing
sequentially by 9.5%; gross margin is expected to be about 38.5%.
-- "For 2021, we plan to invest about $1.8 billion to $2.0 billion in CAPEX
to support the strong market demand and our strategic initiatives."
Quarterly Financial Summary (U.S. GAAP)
(US$ m, except per share data) Q4 2020 Q3 2020 Q4 2019 Q/Q Y/Y
------------------------------- ------- ------- ------- ------- -------
Net Revenues $3,235 $2,666 $2,754 21.3% 17.5%
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Gross Profit $1,254 $959 $1,081 30.8% 16.0%
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Gross Margin 38.8% 36.0% 39.3% 280 bps -50 bps
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Operating Income $657 $329 $460 99.6% 42.7%
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Operating Margin 20.3% 12.3% 16.7% 800 bps 360 bps
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Net Income $582 $242 $392 139.8% 48.4%
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Diluted Earnings Per Share $0.63 $0.26 $0.43 142.3% 46.5%
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Annual Financial Summary (U.S. GAAP)
(US$ m, except earnings per share data) FY2020 FY2019 Y/Y
---------------------------------------- ------- ------ --------
Net Revenues $10,219 $9,556 6.9%
---------------------------------------- ------- ------ --------
Gross Profit $3,789 $3,696 2.5%
---------------------------------------- ------- ------ --------
Gross Margin 37.1% 38.7% -160 bps
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Operating Income $1,323 $1,203 9.9%
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Operating Margin 12.9% 12.6% 30 bps
---------------------------------------- ------- ------ --------
Net Income $1,106 $1,032 7.2%
---------------------------------------- ------- ------ --------
Diluted Earnings Per Share $1.20 $1.14 5.3%
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Fourth Quarter 2020 Summary Review
Net Revenues By Product
Group (US$ m) Q4 2020 Q3 2020 Q4 2019 Q/Q Y/Y
--------------------------- --------- --------- --------- ------- -------
Automotive and Discrete
Group (ADG) 953 851 924 12.1% 3.2%
--------------------------- --------- --------- --------- ------- -------
Analog, MEMS and Sensors
Group (AMS) 1,419 997 1,085 42.4% 30.8%
--------------------------- --------- --------- --------- ------- -------
Microcontrollers and
Digital ICs Group (MDG) 859 815 742 5.3% 15.7%
--------------------------- --------- --------- --------- ------- -------
Others 4 3 3 - -
--------------------------- --------- --------- --------- ------- -------
Total Net Revenues 3,235 2,666 2,754 21.3% 17.5%
--------------------------- --------- --------- --------- ------- -------
Net revenues totaled $3.24 billion, representing a year-over-year
increase of 17.5%. On a year-over-year basis, the Company recorded
higher net sales in all product groups except the RF Communications
(former "Digital") sub-group. Year-over-year net sales to OEMs and
Distribution increased 19.8% and 11.4%, respectively. On a sequential
basis, net revenues increased 21.3%, 580 basis points above the high end
of the Company's guidance. All product groups except the RF
Communications sub-group reported increases in net revenues on a
sequential basis.
Gross profit totaled $1.25 billion, representing a year-over-year
increase of 16.0%. Gross margin of 38.8% decreased 50 basis points
year-over-year, mainly due to usual price pressure and negative currency
effects, net of hedging, partially offset by improved mix and lower
unloading charges. Fourth quarter gross margin was 30 basis points above
the mid-point of the Company's guidance.
Operating income increased 42.7% to $657 million, compared to $460
million in the year-ago quarter. The Company's operating margin
increased 360 basis points on a year-over-year basis to 20.3% of net
revenues, compared to 16.7% in the 2019 fourth quarter. Fourth quarter
other income and expenses, net, was $131 million compared to $54 million
to the year-ago quarter mainly due to a non-recurrent favorable impact
mainly associated with the Important Projects of Common European
Interest (IPCEI) R&D grants catch-up.
By product group, compared with the year-ago quarter:
Automotive and Discrete Group (ADG):
-- Revenue increased in both Automotive and in Power Discrete.
-- Operating profit decreased by 16.4% to $94 million. Operating margin was
9.9% compared to 12.2%.
Analog, MEMS and Sensors Group (AMS):
-- Revenue increased in Imaging, Analog and MEMS.
-- Operating profit increased by 42.9% to $402 million. Operating margin was
28.3% compared to 25.9%.
Microcontrollers and Digital ICs Group (MDG):
-- Revenue increased in Microcontrollers and decreased in RF Communications.
-- Operating profit increased by 46.4% to $174 million. Operating margin was
20.3% compared to 16.0%.
Unused capacity charges are included under the group "Others".
Net income and diluted earnings per share increased to $582 million and
$0.63, respectively, compared to $392 million and $0.43, respectively,
in the year-ago quarter.
Cash Flow and Balance Sheet Highlights
Trailing 12 Months
------------- -------- -------- --------- --------------------------------
Q4 Q3 TTM
(US$ m) 2020 2020 Q4 2019 Q4 2020 Q4 2019 Change
------------- -------- -------- --------- --------- --------- ----------
Net cash
from
operating
activities 922 385 775 2,093 1,869 12.0%
------------- -------- -------- --------- --------- --------- ----------
Free cash
flow
(non-U.S.
GAAP) 512 (25) 461 627 497 26.2%
------------- -------- -------- --------- --------- --------- ----------
Capital expenditure payments, net of proceeds from sales, were $381
million in the fourth quarter and $1.28 billion for the full year 2020.
In the year-ago quarter, capital expenditures, net, were $236 million.
Inventory at the end of the fourth quarter was $1.84 billion, up from
$1.69 billion in the year-ago quarter. Day sales of inventory at
quarter-end was 84 days compared to 90 days in the year-ago quarter.
Free cash flow (non-U.S. GAAP) was $512 million in the fourth quarter,
compared to $461 million in the year-ago quarter.
In the fourth quarter, the Company paid cash dividends to its
stockholders totaling $40 million.
ST's net financial position (non-U.S. GAAP) was $1.1 billion at December
31, 2020 compared to $662 million at September 26, 2020 and reflected
total liquidity of $3.72 billion and total financial debt of $2.62
billion.
Business Outlook
The Company's guidance, at the mid-point, for the 2021 first quarter is:
-- Net revenues are expected to be $2.93 billion, a decrease of 9.5%
sequentially, plus or minus 350 basis points;
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